Bloomberg New Energy Finance has released a report this week entitled the New Energy Outlook 2016 – a review of how the world’s power markets will develop over time. The highlights all point to the phasing out of old fuels and the growth of renewable energy.
Some of the key points are below:
New investment is largely directed at renewables. Between 2016 and 2040 $7.8 US Trillion will be invested in renewables, beating out only $3.2 US Trillion to be directed at fossil fuels and nuclear. This will represent a shift to nearly 60% of the world’s power being created through zero-emission methods.
This shift has emerged due to the falling prices of gas and coal between 2010 and 2016 coupled with a global attitude shift towards renewable power source. Even as coal prices rise when tensions mount, the price of wind and solar power continues to fall. By 2040 onshore wind price is expected to fall 41% and solar will fall by a whopping 60%. TheBN largest developing market for energy use will be the Asia-Pacific region. China, one of the fastest and most extensively growing players, will be adding 76% of its new growth in the renewables field, with coal capacity and generation peaking in the 2020s and 30s. India will see similar changes in energy ratios but with a growth of expected 299% into 2040.
More developed countries will see the energy shift later, but even the US will see the bulk of energy investments into renewables by the mid-2020s. In Europe focus will be on decarbonization as the nuclear plants age and are replaced by cleaner power.
Seb Henbest, head of Europe, Middle East and Africa for BNEF, and lead author of NEO 2016, commented: “Some $7.8 trillion will be invested globally in renewables between 2016 and 2040, two thirds of the investment in all power generating capacity, but it would require trillions more to bring world emissions onto a track compatible with the United Nations 2°C climate target.”
The news is not all positive – to still meet below the two-degree trajectory another $5.4 US Trillion will need to be invested in the energy sector to help cut carbon emissions and transfer power sources over to renewable methods. At the present rate, annual global emissions are projected to peak and level out slightly below peak but not decrease significantly, which is the action needed to ensure the two-degree global temperature rise is avoided.
Elena Giannakopoulou, senior energy economist on the NEO 2016 project, added: “One conclusion that may surprise is that our forecast shows no golden age for gas, except in North America. As a global generation source, gas will be overtaken by renewables in 2027. It will be 2037 before renewables overtake coal.”
The paper can be found through the Bloomberg website and offers a comprehensive look into the best forecasted energy futures at present time.